What has happened?
On Sunday 9 February 2014 Swiss voters adopted the “Stop mass immigration” initiative (German: “Initiative gegen die Masseneinwanderung”) as initiated by the Swiss People’s Party (SVP) and driven by the growing concerns among the Swiss population, for instance in regard to wage dumping, increased crime, rising rental and property costs, congested transportation networks, etc. Interestingly, the voters of the Cantons of Zurich, Geneva and Basel-Stadt, both economically influential and most affected by immigration, were unable to sway things towards a rejection of the initiative.
Thus, with a narrow majority of 50.3%, Swiss voters decided to add a new article to the Federal Constitution that re-introduces immigration quotas in regard to all types and categories of Swiss residence and work permits.
This verdict not only calls the bilateral agreement between Switzerland and the EU into question but – as a consequence of the so called “Guillotine Clause”, entitling one party to unilaterally terminate all agreements if one of them in the set of bilateral agreements is violated – also all other bilateral treaties with the EU (in the context of mobile work force e.g. also the Schengen Agreement).
As a first reaction EU representatives stated that they would examine the implications on the relationship with Switzerland based on the position of the Swiss Federal Council, which had urged citizens to reject the initiative. However, they emphasize that the principle of free movement of persons is a cornerstone of the EU and as such not negotiable.
Reminder: what is the current status?
Even now, the majority of work permit types are subject to a quota, namely the following:
- Work permits for all non-EU/EFTA citizens, whether locally employed by a Swiss employer or assigned to Switzerland;
- Work permits for EU/EFTA citizens that are locally employed by a Swiss employer with a limited or unlimited employment contract exceeding one year;
- Work permits for employees of EU/EFTA-domiciled employers to be assigned to Switzerland if the total number of days on which one or several such employees are working in Switzerland exceeds 90 days in a calendar year.
However, according to the agreement on the free movement of persons, the restrictions on the second group above ceases to apply as per 31 May 2014 with regard to all EU citizens, with the exception of Romanian, Bulgarian (and potentially Croatian) citizens for which the restrictions remain in place until (at least) 2016.
In other words, currently only the following work permit types are not subject to quota:
- Residence/work permits type L for EU/EFTA citizens employed by a Swiss employer with a limited contract of a maximum of 12 months; and
- Short-term residence permits for short-term assignees of EU-domiciled employers if maximum of 90 days (per calendar year) of assigned employees has not been exceeded (basically applicable to EU/EFTA citizens. To non-EU/EFTA citizens only if they are already employed in EU/EFTA and by EU/EFTA employer for more than 12 months)
- All kinds of dependent permits (with or without employment).
The quotas are being set annually by the Swiss Federal Council and are allocated based on the “first come first serve” principle to applying employers. However, in 2013 as well as in 2012 only the quotas regarding EU/EFTA assignees became scant towards the end of the calendar year, whereas the others sufficed.
What will change?
For the time being the current immigration system remains fully in force unchanged. However, the outcome of the vote obliges the Swiss Federal Council to mandate the parliament with elaborating a new article in the Federal Constitution based on the initiative and to enforce it within three years.
Thus, assuming that
- the Swiss Federal Council will fully exploit the three years implementation term; and that
- the EU is not likely to invoke the Guillotine Clause – if at all – prior to seeing (i) the principle of free movement of persons factually violated by the legal implementation of the initiative or (ii) Switzerland to refusing the extension of the free movement of persons on Croatia in the voting in 2015
changes are to be expected in a couple of months at the earliest.
How exactly such changes will look like depends on the way the Federal Council turns the initiative into law and the outcome of the corresponding negotiations with the EU. In this regard, the initiative leaves some wiggle room to the Swiss government and does in particular not provide any (maximum) quota figures. Thus, at this early stage no reliable predictions can be made.
In any case, however, also permits for cross-border commuters, dependents and asylum seekers shall newly be subject to quota according to the new article in the Swiss constitution.
In steady exchange with the federal and cantonal authorities the KPMG Immigration Services Team will closely monitor any future developments and inform its clients promptly of any news and potentially resulting need for action.